Equity value
Definition · Level 10 · Valuation
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Share price × diluted shares: what the shareholders’ claim on the business is worth. The quoted market cap usually uses basic shares.
Example
Brewline: 75M diluted shares × $20 = $1,500M.
Where Tradecraft teaches it
Level 10 · Valuation, in the lesson “Enterprise value and EV/EBITDA”: From the value of the shares to the price of the whole business, and the multiples that go with it.
Related terms
- Enterprise valueWhat the whole operating business is worth to all its capital providers: equity value + debt + preferred stock + minority interest − cash.
- EV/EBITDAEnterprise value ÷ operating earnings before depreciation and amortization.
- Minority interestThe stake outside shareholders hold in subsidiaries a parent consolidates but doesn’t fully own; also called non-controlling interest.
- P/S vs EV/SalesMarket cap ÷ revenue, versus enterprise value ÷ revenue.
- 10-K / 10-Q / 8-KFilings with the US Securities and Exchange Commission: the audited annual report, the unaudited quarterly report, and the current report for…
- Accretive buybackA share repurchase that raises earnings per share: the earnings yield of the shares bought (EPS ÷ price) beats the after-tax cost of the cash used.